
Following the reduction in outsourcing prices in 2009, analysts are predicting further falls in 2010. The price drops are not just the effect of the recession, other factors include price pressure from customers, increased use of offshore services, and de-scoping of outsource vendor services.
One school of thought suggests that if the economy begins to grow again some outsourcers will try to recoup some of the concessions they have had to make. This, however, is unlikely given increased competition from offshore.
In the UK the 'green tax' (Carbon Requirement Commitment) will be introduced in 2010 which may drive up the costs of UK outsourcers (Could the new green tax disadvantage UK outsourcers?). An offshore vendor in India, for example, would not currently be subject to such a tax.
Another competitive effect will be cloud computing. As this market matures and customers understand, and are comfortable with, software as a service pricing, then cloud services will become a viable alternative to both in-house and outsourced IT services (How will cloud computing affect traditional outsourcers?).